NGL Acquires Gavilon’s Energy Business for $890M

NGL Energy Partners LP recently announced it has completed the acquisition of all of the equity interests of Gavilon LLC, the diversified midstream energy business owned by funds managed by Ospraie Management, General Atlantic and Soros Fund Management.

NGL Energy Partners L.P. has completed the $890 million acquisition of the equity interests of Gavilon L.L.C., the diversified midstream energy business owned by funds managed by Ospraie Management, General Atlantic and Soros Fund Management.

The recent confirmation followed NGL’s announcement in November it had reached a definitive agreement to purchase Gavilon’s energy business on a cash-free, debt-free basis that includes approximately $200 million of working capital.

As previously announced, the cash purchase price has been financed with approximately $240 million of equity under a private placement of common units and around $650 million of borrowings under its credit facility. NGL announced it has completed the issuance and sale of about 8.1 million of its common units to a group of institutional investors in a private placement at a price of $29.95 per unit. UBS Investment Bank acted as sole placement agent for the offering. Andrews Kurth L.L.P. provided legal representation for NGL.

Gavilon, a company that principally operates integrated crude oil storage, terminal and pipeline assets situated in Oklahoma, Texas and Louisiana, also includes a complementary crude oil and refined products, supply, marketing and logistics business. Gavilon markets and supplies refined products and natural gas liquids through a network of over 300 distribution terminals across 39 states. The company’s crude oil assets also include a 50 percent interest in Glass Mountain Pipeline, 4.1 million owned and 3.9 million leased barrels of storage in Cushing, Okla., a marine terminal and nine truck terminals.

“This combination is important for NGL, adding our first major pipeline investment in addition to crude oil storage at Cushing,” said H. Michael Krimbill, the company’s CEO, in a statement. He added that Glass Mountain Pipeline is on track to start operations next month.

Gavilon CEO Greg Piper stated, “Our employees and executive team are excited to join the NGL organization. We have multiple organic projects in development and look forward to continuing to enhance and expand our energy footprint.”

UBS Investment Bank served as NGL’s exclusive financial advisor for the Gavilon acquisition and Locke Lord L.L.P. served as legal counsel. Barclays was financial advisor to Gavilon and the sellers. Jones Day and McGrath North provided legal representation for Gavilon.